Engro’s LNG terminal sets sail to Qatar for refill

KARACHI: Engro’s liquefied natural gas terminal Saturday left for Qatar for the second refilling, a company’s top official said; although the terminal use as a carrier invokes criticism from its owner.
Shaikh Imran-ul-Haq, chief executive officer at Engro Elengy confirmed that the vessel, Floating Storage Re-gasification Unit (FSRU) Exquisite, will take trips according to the requirement.
Sources said the FRSU will make at least four refilling rounds till June 23, 2015.
“FSRU is a multi-purpose unit and also used as (a) carrier all over the world. It is a good thing that it can transport the commodity by itself instead of staying idle,” Haq said.
However, the real owner of the FSRU, US-based Excelerate Energy, raised objection over the movement of the carrier. The company, in a statement, said it (FSRU) was meant to be berthed for entire 15-year contract period and could not be allowed to be used as an LNG carrier.
Replying to a query, Haq said the government alone could answer as to why they are not able to bring other carriers for refilling Exquisite while it is berthed.
Last month, the Exquisite had docked at the Port Qasim, carrying the volume equivalent to 3,000 million metric cubic feet/day (mmcfd).
The News learnt that the fee to be charged by Engro for Exquisite’s refilling entourage would be higher than the regular charges for the similar transportation. Engro’s official declined to comment on this.
The injection of the re-gasified LNG (from the first parcel) into the national transmission system came to an end on April 14. The government is liable to pay $0.272 million as capacity charges to Engro. It is to pay more than $1.0 million for the period in which Engro did not incur any variable costs.
CEO Engro Elengy said there are no duty issues with the Customs and the FSRU’s departure for the refill was delayed because there was no LNG procurement deal signed with the government.
Customs officials said five percent customs duty is applicable on the terminal. Duty will be collected once it is permanently berthed, they added. “As for now it is carrier, there is no duty (collection),” an official said.
The Pakistan State Oil paid Rs581 million to the customs authorities as 17 percent sales tax, which was imposed on LNG import by the Economic Coordination Committee of the Cabinet.
The import of LNG in Pakistan is faced with one controversy after another primarily because of vague and contradictory information disseminated by all concerned quarters, including Engro.
Among all the controversies, Engro’s stocks keep thriving amid the reports that the company is planning to list Engro Elengy on the capital marker.
Moreover, Engro also has planned to bring even larger FSRU in place of Exquisite to cater to the needs of government for which the tender for the second LNG terminal is already under the process.
The terminal is designed to handle 600mmcfd. Contractually, the government can use up to 400mmcfd of capacity. The second LNG terminal is also envisaged up to 400mmcfd.
Sources said Engro was in talks with Excelerate Energy and another company to bring an over 1,000mmcfd capacity FSRU.